Market Report: Rio Tinto gains in flight from eurozone stocks
As the eurozone-inspired sell-off finally paused for breath yesterday, there was a rare chance for the Footsie to regain some ground. Yet while the benchmark index attempted a recovery of sorts after having lost more than 300 points last week – which was its worst for nine months – the thoughts of many in the Square Mile remained on what further stormclouds lie ahead.
With scribblers from JPMorgan urging investors to "use any bounces as opportunities to reduce risk", their counterparts at Deutsche Bank were looking at which companies to own in these tumultuous times.
Although they admitted there were "no absolute safe havens", the broker's analysts decide to pick six UK-listed firms that, they claimed, "can perform in good and bad times".
Unsurprisingly, a strong presence in the eurozone was not welcome. All of the choices get at least four-fifths of their revenues from outside the Continent, while the criteria also included having a strong balance sheet.
Of the six, the mining giant Rio Tinto closed the highest last night as it moved up 35p to 2,823p. The drugs maker Shire was not so lucky, sliding 6p to 1,909p, although Diageo frothed up 12.5p to 1,508p.
The brewer of Guinness was also being toasted by Oriel Securities' Chris Wickham, who recommended it as a "buy", saying that the group's brands were well-placed to benefit from drinkers deciding to trade up their tipples.
Others in Deutsche Bank's basket of stocks included the energy explorer Premier Oil and sweeteners maker Tate & Lyle, which shifted up 2p to 330.1p and 1p to 657.5p. However, the events organiser United Business Media was pegged back 3.5p to 524p despite also getting the nod.
After five straight trading sessions in the red, the FTSE 100 finally managed to bounce, climbing 36.86 points to 5,304.48. The heavyweight diggers were among those staging a recovery, including Vedanta Resources, which was the best of the bunch after advancing 49.5p to 1,008p.
While its fellow precious metal miner Fresnillo retreated 39p to 1,319p, Randgold Resources moved up 39p to 4,933p following the news that both its chief executive and chief financial officer had stocked up on shares on Friday.
Heritage Oil was clear at the top of the FTSE 250 after being lifted 3p to 112p. Traders linked the explorer's rise to expectation-beating results from Norway's DNO, which, like Heritage, is involved in Kurdistan. Meanwhile comments over the weekend from the Kurdistan minister Ashti Hawrami were also being highlighted after he said the semi-autonomous Iraqi region expected to begin oil exports through a new pipeline by August next year.
Bid talk was making a return around Dairy Crest, although the group was unable to milk it, edging up just 1.6p to 311.1p. Turning buyers on the stock, analysts from the French broker Exane BNP Paribas argued that there was a "good probability of a takeout on a multi-year view".
Meanwhile, the iron ore miner Ferrexpo – which has shed more than a third of its share price over the past two months – rallied 7.1p to 218.1p as market gossips returned to vague speculation that it could be a takeover target for Rio Tinto.
While Cable & Wireless Worldwide pushed up 0.4p to 34.9p on the release of its full-year figures, Cable & Wireless Communications – from which it demerged in 2010 – slipped back 0.51p to 28.49p ahead of Thursday's preliminary results. Nomura's James Britton was hardly optimistic, keeping his "reduce" advice and saying he expects the dividend to be halved.
There were some rather angry punters in Pursuit Dynamics. After the AIM-listed tech firm announced last Friday it knew of no reason why its share price fell nearly 25 per cent in just one session, today it had one. The US consumer goods giant Procter & Gamble has decided to pull the plug on the joint development agreement that saw it use Pursuit's PDX reactor technology, designed to help slash energy costs. As a result, Pursuit admitted its revenue figures for the year would "materially" miss forecasts, prompted its share price to be knocked back a huge 56.25p – or 79 per cent – to 14.75p, with one trader describing the news as "absolutely horrific".
Meanwhile, Ithaca Energy's charge up of 24p to 173p was being linked to hopes that there could be some good news on the way from the explorer, which earlier in the month announced it was still talking to possible suitors.
FTSE 100 Risers
* Man Group 78.8p (up 3.5p, 4.65 per cent) The world's largest listed hedge fund finishes high up the Footsie as the market cheers its deal to buy the investment group FRM for up to $82.8m.
* Royal Bank of Scotland 20.8p(up 0.81p, 4.05 per cent) The best performer among its UK-listed peers, the bank – which had dropped over a fifth in less than three weeks – is one of the biggest blue-chip rebounders.
FTSE 100 Fallers
* Centrica 310.6p (down 4.4p, 1.4 per cent) British Gas owner is one of a number of utilities to fall, with investors deciding to move away from defensive stocks as the market attempts to rebound.
* Rolls-Royce 801p (down 3.5p,0.44 per cent) Engineering giant retreats despite announcing it has won contracts worth $136m with the Middle East natural gas project Dolphin Energy.
FTSE 250 Risers
* Kesa Electricals 50.85p (up 2.35p, 4.85 per cent) Electronics retailer moves up for second consecutive trading session, having fallen to an all-time low last Thursday following its end-of-year trading statement.
* Cranswick 825p (up 6.5p, 0.79 per cent) Punters' appetite for pork supplier increases after it announces it saw its highest ever sales over the financial year, with pre-tax profits rising 3 per cent.
FTSE 250 Fallers
* Informa 369.6p (down 14.3p, 3.72 per cent) Business media company is one of the worst mid-tier stocks, finishing deep in the red, despite saying its expectations for the full-year remain unchanged.
* Lamprell 117p (down 4p, 3.31 per cent) Further pain for oil rig manufacturer which has its rating downgraded by Nomura to "reduce" from "buy" after last week's surprise profit warning.
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